Stock market rudderless as Washington agenda dominates

Tom Williams | CQ Roll Call| Getty Images

The U.S. Capitol.

I hate it when Washington is in charge of the agenda. Nothing good comes of it. Stocks are rudderless because the near-term catalysts are negative...it revolves around Obamacare and a clean spending bill, and no one on Wall Street wants to watch the Republicans and the Democrats beat each other up on Obamacare again.

But more importantly it's about the lack of leadership from the Federal Reserve. Neither William Dudley (who is a voting member on the FOMC) nor Richard Fisher (who is not) moved the markets today when they spoke.

Why not? Because what we need is a clear cue from the Fed on what they will be doing, but the more Fed officials talk, the more confusing it gets.

Dudley said that the two tests for tapering--an improvement in the economy and the labor market--had not been met, and the Fed could "wait a long time" to raise rates after unemployment hits the 6.5 percent threshold.

Fisher went in the opposite direction, arguing the Fed should have tapered and that not acting was undermining the Fed's credibility.

What we need to hear is a clear message from the Fed and it's not coming through. And we may not get it: traders are increasingly concerned that the September Nonfarm Payroll report, out October 4, will again be one of those "nothing" numbers, around 150,000, neither hot nor cold, that doesn't help resolve the issue.

It doesn't help that both Ben Bernanke and Janet Yellen are practically in radio silence mode. Yellen went so far as to cancel a speech to the New York Economics Club for October 1.

The message from Yellen: I'm on the sidelines until confirmation.

Where does this leave us? With a rudderless market. You can see this with the big names that were at new highs a few days ago, that are rolling over Friday and today.

I'm talking big tech stocks like Yelp (YELP), LinkedIn (LNKD), Google (GOOG), Facebook (FB), and Yahoo! (YHOO). Same goes for other big trading stocks like Zillow (Z) and Tesla (TSLA). Same with Amazon (AMZN) and Netflix (NFLX), both consumer discretionary stocks. All down one to six percent.

It doesn't end there. Biotechs have been an investment darling this year, but they too have been heavily for sale in the last two days.

Most worrisome: financial stocks have been quietly rolling over for several weeks. Financials are the second-largest sector in the S&P 500 after tech and have outperformed the broader market all year—until August. The underperformance has been accelerating in the past few days. Some of it is because the lower interest rates since the Fed announcement have weighed on this group, particularly regional banks.

No matter: when a major market leader starts to roll over--and we are not talking about a one or two day affair--the Street notices.

—By CNBC's Bob Pisani

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